Only need to solve 5.7

ercises 5.2-5.9 make use of the following information Ex about the mean returns and covariances for three stocks. The numbers used are hypothetical. Covariance with AOL MicrosoftInte Return .002 Stock 0 .001 002 15% 12 10 AOL .001 Microsoft 00 002 0 .001 Intel 5.2. Compute the tangency portfolio weights assuming a 5.3. How does your answer to exercise 5.2 change if the 5.4. Draw a mean-standard deviation diagram and plot risk-free asset yields 5 percent. risk-free rate is 3 percent? 7 percent? AOL, Microsoft, and Intel on this diagram as well as the three tangency portfolios found in exercises 5.2 and 5.3. 5.5. Show that an equally weighted portfolio of AOL Microsoft, and Intel can be improved upon with marginal variance-marginal mean analysis. Repeat exercises 5.2 and 5.3, but use a spreadsheet to solve for the tangency portfolio weights of AOL Microsoft, and Intel in the three cases. The solution of the system of equations requires you to invert the matrix of covariances above, then post multiply the inverted covariance matrix by the column of risk premiums. The solution should be a column of cells, which needs to be rescaled so that the weights sum to 1. Hint: See footnote 1 5.6. 5.7. a. Compute the betas of AOL, Microsoft, and Intel with respect to the tangency portfolio found in exercise 5.2. ercises 5.2-5.9 make use of the following information Ex about the mean returns and covariances for three stocks. The numbers used are hypothetical. Covariance with AOL MicrosoftInte Return .002 Stock 0 .001 002 15% 12 10 AOL .001 Microsoft 00 002 0 .001 Intel 5.2. Compute the tangency portfolio weights assuming a 5.3. How does your answer to exercise 5.2 change if the 5.4. Draw a mean-standard deviation diagram and plot risk-free asset yields 5 percent. risk-free rate is 3 percent? 7 percent? AOL, Microsoft, and Intel on this diagram as well as the three tangency portfolios found in exercises 5.2 and 5.3. 5.5. Show that an equally weighted portfolio of AOL Microsoft, and Intel can be improved upon with marginal variance-marginal mean analysis. Repeat exercises 5.2 and 5.3, but use a spreadsheet to solve for the tangency portfolio weights of AOL Microsoft, and Intel in the three cases. The solution of the system of equations requires you to invert the matrix of covariances above, then post multiply the inverted covariance matrix by the column of risk premiums. The solution should be a column of cells, which needs to be rescaled so that the weights sum to 1. Hint: See footnote 1 5.6. 5.7. a. Compute the betas of AOL, Microsoft, and Intel with respect to the tangency portfolio found in exercise 5.2